Poverty is a policy choice – it is time for the government to choose better
If the government decided to make raising Jobseeker a priority in the Budget it would not talk about not being able to afford it, writes Greg Jericho.
In 2022 Josh Frydenberg gave the Budget game away when he was reported justifying the many billions of dollars spent on Aukus by saying, “everything is affordable if it’s a priority.” Julia Gillard in 2014 also revealed the Budget reality when she told the audience at the Joan Kirner justice oration “Budgets are made of choices. They make us… think about what we care about the most”.
When we put those two lines together it becomes what I call the Budget Commandment: “Everything is affordable if we choose to care about it”.
Over the next two weeks we are going to hear a great deal from the government about not being able to afford everything. What it means is that it has decided not to spend money on something because it has decided it is not a priority that it cares about the most.
This is relevant because last week the government’s Economic Inclusion Advisory Committee released its second report. It recommended help those in poverty, especially those who were unemployed.
The first recommendation was to raise the level of Jobseeker to 90% of the age pension.
We should at this point note that Australia has the lowest unemployment rate in the OECD when measured using the standard “replacement rate” metric of the level of the benefits relative to average earnings. In essence it is tougher to live in unemployment benefits in Australia than in any other advance economy.
That is a choice made by governments, and it needs to end. Lifting the Jobseeker to 90% of the age pensions would only raise Australia to being the fourth lowest unemployment benefit in the OECD.
And yes raising the rate to around $1,004.67 a fortnight from the current rate of $771.50 (including the energy supplement) would cost around $4.6bn. But that is not a cost beyond the government’s resources. It is in fact equal with the estimate for the amount of fuel tax credit going to the mining industry in 2024-25 and it is well below the estimated $12.7bn that will go only to the richest 190% of taxpayers from the capital gains discount.
Budgets are about choices and about deciding what are the things that matter to you. Lets us hope in two weeks time the government chooses to
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